Key Facts
- •Moorwand Ltd (petitioner) filed a winding-up petition against K Wearables Ltd (respondent) for an unpaid debt of £56,462.23 under a card association issuing agreement.
- •K Wearables disputes the debt, claiming the agreement should be rescinded due to fraudulent misrepresentation by Moorwand regarding the provision of acquiring services, and/or that Moorwand provided poor service.
- •K Wearables alleges Moorwand misrepresented its in-house acquiring capabilities, inducing K Wearables to switch issuers.
- •Moorwand denies making any representation to provide acquiring services, highlighting that the agreement only covers issuing services.
- •Evidence includes emails, witness statements, and Moorwand's website and press releases, which contradict each other on Moorwand's acquiring capabilities.
Legal Principles
To dismiss a winding-up petition, the company must show a substantial dispute on grounds.
Re Bayoil SA [1999] 1 WLR 147; Wilson and Sharp Investments Ltd v Harbour View Developments Limited [2014] EWCA Civ 1030
The court considers whether the cross-claim was genuinely believed when raised, and reasons for not litigating it earlier.
Various cases referenced in the judgment
A debtor company can raise a set-off, counterclaim, or cross-claim in winding-up proceedings, even if it wouldn't be a defense under the contract.
Cases cited by Ms Vacani
A claim for rescission based on fraudulent misrepresentation may negate obligations under the agreement.
Judge's interpretation
Outcomes
The winding-up petition is dismissed.
The court found a serious and genuine cross-claim by K Wearables based on fraudulent misrepresentation regarding acquiring services. The cross-claim’s value, considering potential rescission, exceeds the petitioner's debt.